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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended March 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-09300
COCA-COLA ENTERPRISES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-0503352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 WINDY RIDGE PARKWAY, SUITE 700
ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
770-989-3000
(Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock.
420,546,943 SHARES OF $1 PAR VALUE COMMON STOCK AS OF MAY 9, 2000
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COCA-COLA ENTERPRISES INC.
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED MARCH 31, 2000
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the Quarters
ended March 31, 2000 and April 2, 1999......................... 1
Condensed Consolidated Balance Sheets as of March 31, 2000
and December 31, 1999.......................................... 2
Condensed Consolidated Statements of Cash Flows for the Quarters
ended March 31, 2000 and April 2, 1999......................... 4
Notes to Condensed Consolidated Financial Statements............ 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................... 18
Item 4. Submission of Matters to a Vote of Security Holders............. 18
Item 6. Exhibits and Reports on Form 8-K................................ 19
Signatures............................................................... 20
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED; IN MILLIONS EXCEPT PER SHARE DATA)
QUARTER ENDED
---------------------------
MARCH 31, APRIL 2,
2000 1999
------------ ------------
NET OPERATING REVENUES............................ $ 3,293 $ 3,269
Cost of sales..................................... 2,012 2,043
------- -------
GROSS PROFIT...................................... 1,281 1,226
Selling, delivery, and administrative expenses.... 1,137 1,131
------- -------
OPERATING INCOME.................................. 144 95
Interest expense, net............................. 196 187
Other nonoperating income, net.................... (1) (1)
------- -------
LOSS BEFORE INCOME TAXES.......................... (51) (91)
Income tax benefit................................ (17) (30)
------- -------
NET LOSS.......................................... (34) (61)
Preferred stock dividends......................... 1 1
------- -------
NET LOSS APPLICABLE TO COMMON SHAREOWNERS......... $ (35) $ (62)
======= =======
BASIC AND DILUTED NET LOSS PER SHARE APPLICABLE
TO COMMON SHAREOWNERS............................ $ (0.08) $ (0.15)
======= =======
DIVIDENDS PER SHARE APPLICABLE TO COMMON
SHAREOWNERS...................................... $ 0.04 $ 0.04
======= =======
See Notes to Condensed Consolidated Financial Statements.
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COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
MARCH 31, DECEMBER 31,
ASSETS 2000 1999
------------ ------------
(Unaudited)
CURRENT
Cash and cash investments, at cost
approximating market........................... $ 81 $ 141
Trade accounts receivable, less allowance
reserves of $63 and $62, respectively.......... 1,290 1,347
Inventories:
Finished goods................................ 422 403
Raw materials and supplies.................... 210 266
------- -------
632 669
Prepaid expenses and other current assets....... 443 424
------- -------
Total Current Assets......................... 2,446 2,581
PROPERTY, PLANT, AND EQUIPMENT
Land............................................ 358 359
Buildings and improvements...................... 1,401 1,371
Machinery and equipment......................... 7,335 7,210
------- -------
9,094 8,940
Less allowances for depreciation................ 3,734 3,595
------- -------
5,360 5,345
Construction in progress........................ 201 249
------- -------
Net Property, Plant, and Equipment............. 5,561 5,594
FRANCHISES AND OTHER NONCURRENT ASSETS, NET...... 14,332 14,555
------- -------
$22,339 $22,730
======= =======
See Notes to Condensed Consolidated Financial Statements.
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COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
MARCH 31, DECEMBER 31,
LIABILITIES AND SHAREOWNERS' EQUITY 2000 1999
------------ ------------
(Unaudited)
CURRENT
Accounts payable and accrued expenses............ $ 2,001 $ 2,389
Current portion of long-term debt................ 1,399 1,225
------- -------
Total Current Liabilities..................... 3,400 3,614
LONG-TERM DEBT, LESS CURRENT MATURITIES........... 10,169 10,153
RETIREMENT AND INSURANCE PROGRAMS AND OTHER
LONG-TERM OBLIGATIONS............................ 1,104 1,088
LONG-TERM DEFERRED INCOME TAX LIABILITIES......... 4,874 4,951
SHAREOWNERS' EQUITY
Preferred stock.................................. 44 47
Common stock, $1 par value - Authorized -
1,000,000,000 shares; Issued - 449,069,174
and 448,467,105 shares, respectively............ 449 448
Additional paid-in capital....................... 2,677 2,667
Reinvested earnings.............................. 395 447
Accumulated other comprehensive income (loss).... (101) (74)
Common stock in treasury, at cost - 29,783,359
and 27,149,854 shares, respectively............. (672) (611)
------- -------
Total Shareowners' Equity..................... 2,792 2,924
------- -------
$22,339 $22,730
======= =======
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COCA-COLA ENTERPRISES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN MILLIONS)
QUARTER ENDED
---------------------------
MARCH 31, APRIL 2,
2000 1999
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss........................................ $ (34) $ (61)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation................................... 204 211
Amortization................................... 114 111
Deferred income tax benefit.................... (39) (43)
Net changes in current assets and current
liabilities................................... (339) (334)
Other.......................................... 59 31
------- -------
Net cash used in operating activities........... (35) (85)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in capital assets................... (205) (235)
Fixed asset disposals........................... 6 3
Cash investments in bottling operations, net of
cash acquired.................................. -- (8)
Other investing activities...................... (4) (22)
------- -------
Net cash used in investing activities........... (203) (262)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in commercial paper................ 22 304
Issuance of long-term debt...................... 374 432
Payments on long-term debt...................... (194) (433)
Stock purchases for treasury.................... (63) (1)
Cash dividend payments on common and preferred
stock.......................................... (1) (18)
Exercise of employee stock options.............. 4 14
Cash received on currency hedges................ 36 69
------- -------
Net cash derived from financing activities...... 178 367
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
INVESTMENTS..................................... (60) 20
Cash and cash investments at beginning of
period......................................... 141 68
------- -------
CASH AND CASH INVESTMENTS AT END OF PERIOD....... $ 81 $ 88
======= =======
SUPPLEMENTAL NONCASH INVESTING AND FINANCING
ACTIVITIES
Investments in bottling operations:
Fair value of assets acquired................. $ -- $ 1,134
Debt issued and assumed....................... -- (418)
Other liabilities assumed..................... -- (112)
Equity issued................................. -- (596)
------- -------
Cash paid, net of cash acquired............... $ -- $ 8
======= =======
See Notes to Condensed Consolidated Financial Statements.
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States (GAAP) for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary for a fair presentation have been
included. For further information, refer to the consolidated financial
statements and footnotes included in the Coca-Cola Enterprises Inc. ("the
Company") Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE B - SEASONALITY OF BUSINESS
Operating results for the first quarter ended March 31, 2000 are not indicative
of results that may be expected for the year ending December 31, 2000 because of
business seasonality. Business seasonality results from a combination of higher
unit sales of the Company's products in the second and third quarters versus the
first and fourth quarters of the year and the methods of accounting for fixed
costs such as depreciation, amortization, and interest expense which are not
significantly impacted by business seasonality. In addition, the first quarter
of 2000 includes one less selling day than the first quarter of 1999,
influencing period comparisons.
NOTE C - PROPERTY, PLANT, AND EQUIPMENT
Effective January 1, 2000, the Company prospectively revised the estimated
useful lives and residual values of certain fixed assets based on the results of
a comprehensive analysis completed in late 1999 of the Company's historical
fixed asset experience. This historical experience generally reflects the
positive impact of various programs designed to improve asset management and
enhance functionality. Specifically, the Company implemented operational systems
to track and monitor assets, structured maintenance and refurbishment programs,
and enhanced purchase specification requirements. The study confirmed that these
programs have extended the useful lives of certain fixed assets, principally
vehicles and cold drink equipment, and increased the value of certain assets
upon disposition. These changes in accounting estimates generally result in
certain of the Company's operating assets being depreciated over longer useful
lives, although the Company's asset life ranges generally did not change.
The impact of the changes in estimates was to decrease net loss during the three
month period ended March 31, 2000 by approximately $31 million or $0.05 per
share after taxes. The revisions will decrease depreciation expense for
full-year 2000 by approximately $160 million.
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE D - NONRECURRING COSTS
In June 1999, the Company recalled product in certain parts of Europe.
Approximately 17 million unit cases of product were recalled, less than 1% of
the Company's total annual volume. The Company continues to expect recovery of
some of the nonrecurring recall costs from insurance and/or third parties;
however, our ultimate recovery is uncertain since discussions continue with the
insurers. Of the total cost estimates of $103 million, $99 million has been
incurred as of March 31, 2000. The balance of $4 million will be incurred during
second quarter 2000 as product destruction is completed.
NOTE E - LONG-TERM DEBT
Long-term debt balances, including current maturities, are adjusted for the
effects of interest rate and currency swap agreements (in millions):
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
U.S. commercial paper (weighted average rates of
5.6% and 4.8%)(A)................................ $ 1,736 $ 1,737
Canadian dollar commercial paper (weighted
average rates of 5.4% and 5.3%).................. 535 509
Canadian dollar notes due 2002 - 2009 (weighted
average rates of 5.9%)........................... 465 460
Notes due 2001 - 2037 (weighted average rates
of 6.9% and 6.8%)................................ 2,115 2,250
Debentures due 2012 - 2098 (weighted average
rate of 7.4%).................................... 3,800 3,800
8.35% zero coupon notes due 2020 (net of
unamortized discount of $1,562 and $1,570,
respectively).................................... 370 362
Euro notes due 2002 - 2021 (weighted average
rates of 6.6% and 6.7%)(B)....................... 1,986 1,722
Various foreign currency debt..................... 366 326
Additional debt................................... 195 212
------- -------
$11,568 $11,378
======= =======
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE E - LONG-TERM DEBT (CONTINUED)
(A) At March 31, 2000 and December 31, 1999, $830 million and $1,154 million of
the Company's U.S. commercial paper had been effectively exchanged into
non-U.S. dollar obligations through currency swap arrangements. These
currency swap arrangements provide for the exchange of U.S. dollars into
euros, Canadian dollars, and British pounds sterling and also provide for
the periodic exchange of interest payments. The Company intends to renew
these short-term currency swap arrangements as they expire. These currency
swap arrangements hedge net investments in international subsidiaries.
(B) In March 2000, the Company issued $288 million of 5.875% notes due 2007
under its Euro Medium Term Note Program.
Aggregate maturities of long-term debt for the five twelve-month periods
subsequent to March 31, 2000 are as follows (in millions): 2001 - $1,399; 2002 -
$2,335; 2003 - $1,141; 2004 - $554; and 2005 - $210.
The Company has domestic and international credit facilities to support its
commercial paper programs and other borrowings as needed. At March 31, 2000 and
December 31, 1999, the Company had $209 million and $157 million, respectively,
of short-term borrowings outstanding under these credit facilities. At March 31,
2000 and December 31, 1999, the Company had $3.8 billion and $3.9 billion,
respectively, of amounts available under domestic and international credit
facilities.
At March 31, 2000 and December 31, 1999, $2 billion of borrowings due in the
next 12 months were classified as maturing after one year due to the Company's
intent and ability through its credit facilities to refinance these borrowings
on a long-term basis.
At March 31, 2000 and December 31, 1999, the Company had available for issuance
approximately $2.7 billion in registered debt securities under a registration
statement with the Securities and Exchange Commission. At March 31, 2000 and
December 31, 1999, the Company had available for issuance $1 billion and $1.3
billion, respectively, in debt securities under a Euro Medium Term Note Program
and at March 31, 2000 and December 31, 1999, the Company had $0.9 billion
available for issuance under a Canadian Medium Term Note Program.
The credit facilities and outstanding notes and debentures contain various
provisions which, among other things, require the Company to maintain a defined
leverage ratio and limit the incurrence of certain liens or encumbrances in
excess of defined amounts. These requirements currently are not, and it is not
anticipated they will become, restrictive on the Company's liquidity or capital
resources.
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE F - INCOME TAXES
The Company's effective tax rates for the first quarters of 2000 and 1999 were
34% and 33%, respectively. A reconciliation of the income tax provision at the
statutory federal rate to the Company's actual income tax provision follows (in
millions):
QUARTER ENDED
-----------------------
MARCH 31, APRIL 2,
2000 1999
--------- ----------
U.S. federal statutory benefit................... $ (18) $ (32)
State (benefit) expense, net of federal
expense (benefit)............................... (1) 1
Taxation of European and Canadian operations,
net............................................. 2 10
Valuation allowance provision.................... -- (4)
Nondeductible items.............................. (1) (3)
Other, net....................................... 1 (2)
------- -------
$ (17) $ (30)
======= =======
NOTE G - STOCK-BASED COMPENSATION PLANS
The Company granted approximately 1.1 million service-vested stock options to
certain executive and management level employees and non-employee officers
during the first quarter of 2000. These options vest over a period of up to four
years and expire ten years from the date of grant. Of the total options granted,
0.7 million were granted at an exercise price equal to the fair market value of
the stock on the grant date, and 0.4 million were granted at exercise prices in
excess of fair market value.
An aggregate of 0.6 million shares of common stock were issued during the first
quarter of 2000 from the exercise of stock options.
NOTE H - PREFERRED STOCK
In connection with the acquisition of The Coca-Cola Bottling Company of
Bellingham and the acquisition of Great Plains Bottlers and Canners, Inc., the
Company issued 96,900 shares of $1 par value voting convertible preferred stock
("Bellingham series") and issued 401,474 shares of $1 par value voting
convertible preferred stock ("Great Plains series"). The Bellingham series must
be converted no later than June 30, 2001, and the Great Plains series must be
converted no later than August 7, 2003. As of March 31, 2000, 22,100 shares of
Bellingham series have been converted into 93,836 shares of common stock and
35,000 shares of Great Plains series have been converted into 154,778 shares of
common stock from treasury.
NOTE I - SHARE REPURCHASES
Under the April 1996 share repurchase program authorizing the repurchase of up
to 30 million shares, the Company can repurchase shares in the open market and
in privately negotiated transactions. In first-quarter 2000, the Company
repurchased and settled approximately 2.8 million shares of common stock for an
aggregate cost of approximately $63 million. The Company has repurchased a total
of 23 million shares under the program.
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE I - SHARE REPURCHASES (CONTINUED)
Management considers market conditions and alternative uses of cash and/or debt,
balance sheet ratios, and shareowner returns when evaluating share repurchases.
Repurchased shares are added to treasury stock and are available for general
corporate purposes including acquisition financing and the funding of various
employee benefit and compensation plans.
NOTE J - COMPREHENSIVE INCOME (LOSS)
The following table (in millions) presents a reconciliation of comprehensive
income (loss), comprised of net loss and other adjustments. Other adjustments
to comprehensive income (loss) may include minimum pension liability
adjustments, currency items such as foreign currency translation adjustments
and hedges of net investments in international subsidiaries, and
unrealized gains and losses on certain investments in debt and equity
securities. The Company provides income taxes on currency items, except
for income taxes on the impact of currency translations, as earnings from
international subsidiaries are considered to be indefinitely reinvested.
QUARTER ENDED
-----------------------
MARCH 31, APRIL 2,
2000 1999
--------- --------
Net loss......................................... $ (34) $ (61)
Currency items, including tax effects of hedges.. (29) (27)
Unrealized gain on securities, net of tax........ 2 --
------- -------
Comprehensive income (loss)...................... $ (61) $ (88)
======= =======
NOTE K - EARNINGS PER SHARE
The following table presents information concerning basic and diluted earnings
per share (in millions except per share data; per share data is calculated prior
to rounding to millions). Diluted loss per share equals basic loss per share
because of the loss in each period.
QUARTER ENDED
-----------------------
MARCH 31, APRIL 2,
2000 1999
--------- --------
Net loss.......................................... $ (34) $ (61)
Preferred stock dividends......................... 1 1
------- -------
Net loss applicable to common shareowners......... $ (35) $ (62)
======= =======
Basic and diluted average common shares
outstanding...................................... 421 423
======= =======
Basic and diluted net loss per share applicable
to common shareowners............................ $ (0.08) $ (0.15)
======= =======
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COCA-COLA ENTERPRISES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE L - GEOGRAPHIC OPERATING INFORMATION
The Company operates in one industry: the marketing, distribution, and
production of liquid nonalcoholic refreshments. On March 31, 2000, the Company
operated in 46 states in the United States, the District of Columbia, and in the
10 provinces of Canada (collectively referred to as the "North American"
territories), and in Belgium, continental France, Great Britain, Luxembourg,
Monaco, and the Netherlands (collectively referred to as the "European"
territories).
The following presents net operating revenues for the quarters ended March 31,
2000 and April 2, 1999 and long-lived assets as of March 31, 2000 and December
31, 1999 by geographic territory (in millions):
2000 1999
-------------------------- -------------------------
NET LONG- NET LONG-
OPERATING LIVED OPERATING LIVED
REVENUES(A) ASSETS REVENUES(A) ASSETS
------------- ---------- ------------ ----------
North American........ $ 2,498 $15,317 $ 2,429 $15,430
European.............. 795 4,576 840 4,719
------- ------- ------- -------
Consolidated.......... $ 3,293 $19,893 $ 3,269 $20,149
======= ======= ======= =======
(A) Because of acquisitions and business seasonality, reported results may not
be indicative of full-year results for periods presented.
The Company has no material amounts of sales or transfers between its North
American and European territories and no significant United States export sales.
NOTE M - COMMITMENTS AND CONTINGENCIES
In North America, the Company purchases PET (plastic) bottles from manufacturing
cooperatives. The Company has guaranteed payment of up to $262 million of
indebtedness owed by these manufacturing cooperatives to third parties. At March
31, 2000, these cooperatives had approximately $169 million of indebtedness
guaranteed by the Company. The Company has also issued letters of credit
aggregating approximately $153 million primarily under self-insurance programs.
The Company's bottler in Canada, acquired in 1997, is being audited for the
years 1990 through 1996 by the Canadian Customs and Revenue Agency. The
authorities have raised issues that will likely result in an assessment of
additional taxes. The bottler believes it has substantial defenses to the issues
being raised; however, it is too early to accurately predict the amount of any
ultimate assessment or the final outcome of this matter. If an assessment is
made, the authorities by law may require as much as one-half of any amount
assessed to become immediately due and payable while the bottler pursues an
appeal.
The Company is a defendant in various matters of litigation arising out of the
normal course of business. Although it is difficult to predict the ultimate
outcome of these cases, management believes, based on discussions with counsel,
that any ultimate liability would not materially affect the Company's financial
position, results of operations, or liquidity.
-10-
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BUSINESS SUMMARY AND OBJECTIVES
The Company is the world's largest marketer, producer, and distributor of
products of The Coca-Cola Company. The Company also distributes other beverage
brands in select markets. The Company operates in parts of 46 states in the
United States, all 10 provinces of Canada, and in portions of Europe, including
Belgium, continental France, Great Britain, Luxembourg, Monaco, and the
Netherlands.
Our primary objective is to deliver a superior investment return to our
shareowners through sustainable, profitable, long-term per capita consumption
growth. Our continued growth is dependent on the strength of our brands, the
success of our marketing and executional efforts, and consumer confidence in our
products.
Developing profitable business alliances with our customers and the communities
in which we do business is one of our key strategies. Our initiatives for 2000
include continued margin enhancement for the Company and our customers and
sustainable increases in volume across all channels with specific focus on
channels, products, and packages yielding higher margins.
By building on existing relationships and developing new partnerships, we will
continue to build brand equity and deliver value to the Coca-Cola system, our
customers, and our shareowners. We are continuing our pricing initiatives in
North America and have successfully recovered from the product recall in Europe
through effective marketing programs and the exceptional efforts of our
employees.
OUTLOOK
Market conditions in Great Britain where the pound sterling has appreciated
significantly versus the euro has resulted in alternative sourcing options for
our customers within certain distribution channels. These conditions are causing
significant volume and pricing pressure on our operations in Great Britain. In
addition, we now anticipate North America volume results for the remainder of
the year will be up 1 percent to 2 percent versus prior year results.
We have realigned our organization in Great Britain to allocate more resources
directly to the marketplace, and have implemented specific brand-building
programs and promotions against those channels most impacted by the currency
situation. In Great Britain we will incur nonrecurring costs of approximately
$12 million in the second quarter of 2000 under a restructuring of managerial
and administrative functions resulting in a reduction of approximately 300
positions and future cost savings. The anticipated nonrecurring costs
principally represent the costs of severance benefits.
We now expect cash operating profit for full-year 2000, excluding the effects of
currency translations and the $12 million Great Britain nonrecurring costs, to
total $2.46 billion to $2.50 billion, an increase of 6 percent to 8 percent
versus comparable 1999 results. Additionally, should currency translation rates
remain at current levels, these results would be negatively impacted by
approximately $60 million. Including the impact of currency translations at
current levels and excluding nonrecurring items, net income per diluted common
share for full-year 2000 is expected to approximate $0.50 for the year.
-11-
<PAGE> 14
Operating free cash flow for 2000 is expected to remain at the previously
announced level of approximately $200 million as the Company reduces total
capital spending to $1.2 billion for the year.
Management's Discussion and Analysis should be read in conjunction with the
Company's consolidated financial statements and the accompanying footnotes along
with the cautionary statements at the end of this section.
RESULTS OF OPERATIONS
OVERVIEW
Consolidated cash operating profit, or net income before deducting interest,
taxes, depreciation, amortization, and other nonoperating expenses, reached $462
million in the first quarter of 2000, 11% ahead of reported first-quarter 1999
results. Operating income increased by $49 million or 52% resulting from our
efforts to grow cash operating profits and the successes of our capital
management programs resulting in revisions to the estimated useful lives of
fixed assets. Operating income would have been $31 million less, reflecting a 19
percent increase for the quarter, had the revisions in estimated useful lives in
first-quarter 2000 not been made.
Our net loss applicable to common shareowners was $35 million, or a loss of 8
cents per common share, compared to a loss of 15 cents per share in the first
quarter of 1999. Our operating results in the first quarter of each year reflect
the seasonality of our business. Our unit sales are higher in the hotter months
during the second and third quarters of the year and costs such as interest,
depreciation and amortization are not as significantly impacted by business
seasonality.
Operating results for the quarter were unfavorably impacted by: (i) the shift of
Easter selling activity from the first quarter in 1999 to the second quarter of
this year, (ii) one fewer selling day in the first quarter of 2000 than the
first quarter of 1999, and (iii) unfavorable foreign currency comparisons
between the first quarters of 2000 and 1999. Also, pricing initiatives that
began late in first-quarter 1999 in the future consumption sector of our
business unfavorably impacted volume comparisons between first-quarter 2000 and
first-quarter 1999.
Cash Operating Profit ("COP") is used as an indicator of operating performance
and not as a replacement of measures such as cash flows from operating
activities and operating income as defined and required by GAAP. COP is
similar to EBITDA (earnings before interest, taxes, depreciation, and
amortization), a financial measure of the investment community.
NET OPERATING REVENUES AND COST OF SALES
The Company's first-quarter 2000 net operating revenues increased 1% to almost
$3.3 billion. Excluding the impact of unfavorable foreign currency translation
comparisons between quarters, net operating revenues increased approximately 3
percent, reflecting the impact of price increases offset by the Company's volume
performance. The revenue split between our North American and European
operations was 76% and 24%, respectively.
Net revenues per physical case to retailers (bottle and can) increased 4% from
the first quarter of 1999 to the first quarter of 2000. Excluding the impact of
currency translations, the first-quarter 2000 increase would have been 6%
comprised of a 7% increase in North America and a 2% increase in Europe. Net
revenues per case growth to retailers throughout the first quarter reflected
our higher pricing and favorable product, package, and channel mix shifts.
-12-
<PAGE> 15
Cost of sales per physical case (bottle and can) increased 1% from the first
quarter of 1999 to the first quarter of 2000. Excluding the impact of foreign
currency translation comparisons between quarters, the cost of sales per case
increase would have been 4%. This increase results from increases in ingredient
costs and packaging materials costs. We expect a weighted average increase in
concentrate costs for full-year 2000 of approximately 5%.
VOLUME
Volume comparisons for first-quarter 2000 were also impacted by our pricing
initiatives beginning in March 1999, the shift of Easter selling activity to
second-quarter 2000, and one less selling day in first-quarter 2000. Comparable
volume results below adjust for one less selling day in first-quarter 2000.
--------------------------------------------------------------------------
FIRST-QUARTER 2000
---------------------
REPORTED COMPARABLE
CHANGE CHANGE
--------------------------------------------------------------------------
Physical Case Bottle and Can Volume:
Consolidated (3)% (2)%
North American Territories (4)% (3)%
European Territories <1% Flat
--------------------------------------------------------------------------
Volume results in Europe were most significantly impacted by price increases
implemented late in fourth-quarter 1999.
For first-quarter 2000, Coca-Cola Classic and Sprite volume declined by more
than the consolidated volume rate. POWERaDE, Fruitopia, and Dasani all increased
substantially. The Coca-Cola Classic and Sprite decline in North America is
attributed primarily to our pricing initiatives in the future consumption
channels. Strong growth was present in 20 ounce PET packaging (a primary package
in the immediate consumption channels) in several of our high-margin immediate
consumption channels and in vending.
PER SHARE DATA
For first-quarter 2000, our basic and diluted net loss from operations was $0.08
per common share compared to the first-quarter 1999 net loss of $0.15 per common
share. We revised depreciable lives of certain classes of fixed assets and
vehicle salvage values effective January 1, 2000 to reflect the success of our
capital management programs. Depreciation expense for the quarter would have
been approximately $31 million higher ($0.05 per share after taxes) had the
revisions not been made. The loss per share for first-quarter 2000 was favorably
impacted by our efforts to improve the profitability of the future consumption
sector of our business and our continued focus on operating expense control.
SELLING, DELIVERY, AND ADMINISTRATIVE EXPENSES
In first-quarter 2000, consolidated selling, delivery, and administrative
expenses as a percentage of net operating revenues declined slightly to 34.5%
from first-quarter 1999 results of 34.6%. This slight decline was impacted by
depreciation expense that was less than first-quarter 1999 amounts and our
operating cost containment efforts offset by expected lower infrastructure cost
funding from The Coca-Cola Company in 2000 versus 1999.
-13-
<PAGE> 16
INTEREST EXPENSE
First-quarter 2000 net interest expense increased from reported first-quarter
1999 levels due to higher average debt balances, a result of the Company's
capital spending and share repurchase programs. The weighted average interest
rate for first-quarter 2000 was 6.6% compared to 6.7% and 6.6% for first-quarter
and full-year 1999, respectively.
INCOME TAXES
The Company's effective tax rates for the first quarter of 2000 and 1999 were
34% and 33%, respectively. The effective tax rate for full-year 1999 was 33%.
The Company's first-quarter 2000 effective tax rate reflects the expected full
year 2000 pretax earnings combined with the beneficial tax impact of certain
international operations.
CASH FLOW AND LIQUIDITY REVIEW
CAPITAL RESOURCES
Our sources of capital include, but are not limited to, cash flows from
operations, the issuance of public or private placement debt, bank borrowings,
and the issuance of equity securities. We believe that available short-term and
long-term capital resources are sufficient to fund our capital expenditure and
working capital requirements, scheduled debt payments, interest and income tax
obligations, dividends to our shareowners, acquisitions, and share repurchases.
For long-term financing needs, we had available at March 31, 2000 (i) $2.7
billion in registered debt securities for issuance under a registration
statement with the Securities and Exchange Commission, (ii) $1 billion in debt
securities under a Euro Medium Term Note Program, and (iii) an additional $0.9
billion in debt securities under a Canadian Medium Term Note Program.
We satisfy seasonal working capital needs and other financing requirements with
bank borrowings and short-term borrowings under our commercial paper program and
other credit facilities. At March 31, 2000, we had $209 million outstanding
under these credit facilities, with an additional $3.8 billion available for
future borrowings. We intend to continue refinancing borrowings under our
commercial paper programs and our short-term credit facilities with longer-term
fixed and floating rate financings. At the end of first-quarter 2000, the
Company's debt portfolio was 75% fixed rate debt and 25% floating rate debt.
SUMMARY OF CASH ACTIVITIES
Cash and cash investments decreased $60 million during first-quarter 2000 from
net cash transactions. Our primary uses of cash were for operations of
approximately $35 million, capital expenditures totaling $205 million, stock
purchases for treasury of $63 million, and long-term debt payments totaling $194
million. Our primary source of cash for first-quarter 2000 was proceeds from the
increase in commercial paper and the issuance of long-term debt aggregating $396
million.
Operating Activities: Operating activities resulted in a net cash use of $35
million during first-quarter 2000 primarily because of the net loss for the
quarter.
Investing Activities: Net cash used in investing activities resulted primarily
from our continued capital investments. We expect full-year 2000 capital
expenditures to be approximately $1.2 billion.
-14-
<PAGE> 17
Financing Activities: The Company continued to refinance portions of its
short-term borrowings with longer-term fixed and floating rate debt. In
first-quarter 2000, the Company issued $288 million in notes under its Euro
Medium Term Note Program.
FINANCIAL CONDITION
The decrease in net property, plant, and equipment resulted from depreciation
costs net of capital expenditures. The increase in long-term debt primarily
resulted from the financing of our capital expenditures and working capital
needs.
In first-quarter 2000, activities in currency markets resulted in a loss in
comprehensive income of $27 million. As currency exchange rates fluctuate,
translation of the statements of operations for our international businesses
into U.S. dollars affects the comparability of revenues and expenses between
periods.
KNOWN TRENDS AND UNCERTAINTIES
NONRECURRING PRODUCT RECALL COSTS
In 1999, the Company withdrew products in certain European territories because
of quality concerns. The Company incurred approximately $103 million of
nonrecurring costs under the recall in addition to the cost of lost sales. The
Company continues to expect recovery of some of the recall costs from insurance
and/or third parties; however, settlement of reimbursement amounts is in process
and the amount of our ultimate recovery is uncertain.
EURO CURRENCY CONVERSIONS
On January 1, 1999, 11 of the 15 Member States of the European Union established
fixed conversion rates between existing currencies and the European Union's
common currency ("euro"). The Company conducts business in several of these
Member States, and in one (the United Kingdom) that chose not to participate.
The transition period for the introduction of the euro for the participating
countries is January 1, 1999, through January 1, 2002, and by July 1, 2002, all
national currencies for the participating countries will be replaced by the
euro.
We have established a multifunctional task force engaged to address the issues
involved with the introduction of the euro. The issues facing the Company
include converting information technology systems, adapting business processes
and equipment such as vending machines, reassessing currency risk, and
processing tax and accounting records.
The Company is in the process of identifying all material risks and is
developing an implementation plan for the conversion to the euro. The following
table lists certain milestones identified and their projected completion dates
with respect to the euro conversion.
MILESTONES KEY DATES
------------------------------------------ -------------
Business requirements gathering Completed
Solution design and schedule Completed
Development of solutions 3rd Qtr. 2000
Implementation of solutions 4th Qtr. 2000
Begin managing business operations in euro 1st Qtr. 2001
Vending machines ready for euro coinage 4th Qtr. 2001
Finalize local currency conversions 2nd Qtr. 2002
-15-
<PAGE> 18
As of March 31, 2000, the Company had incurred and expensed less than $2 million
in costs associated with this conversion process. The Company estimates the
total cost to complete this project will be in the range of $30 million to $40
million, and approximately 70% of these costs will be capitalized. These costs
represent principal projects to be undertaken to ensure a smooth conversion.
Our business resources currently available are sufficient to meet the
requirements needed to complete the euro initiative. The euro system
activities will be a key part of our ongoing systems standardization process.
Total information technology (IT) spending in Europe for 2000 is expected to
approximate 1999 IT spending levels.
The euro conversion may have long-term competitive pricing implications by
increasing cross-border product price transparency among the participating
countries of the European Union and by changing established local currency price
points. We are continuing to assess our pricing and marketing strategies to
ensure we remain competitive locally and in the broader European market.
However, we cannot reasonably predict the long-term effects one common currency
may have on pricing and costs or the resulting impact, if any, on financial
condition or results of operations. Additionally, the Company may be at risk to
the extent third parties are unable to deal effectively with the impact of the
euro conversion, which in turn could impact Company operations.
Based upon progress to date, the Company believes use of the euro will not have
a significant impact on the manner in which it conducts business or processes
accounting records. However, due to numerous uncertainties we cannot be assured
that all issues related to the euro conversion have been identified and that any
additional issues would not have a material effect on the Company's operations
or financial condition.
TAX CONTINGENCY
The Company's bottler in Canada, acquired in 1997, is being audited for the
years 1990 through 1996 by the Canadian Customs and Revenue Agency. The
authorities have raised issues that will likely result in an assessment of
additional taxes. If an assessment is made, the authorities by law may require
as much as one-half of any amount assessed to become immediately due and payable
while the bottler pursues an appeal. The bottler believes it has substantial
defenses to the issues being raised; however, it is too early to accurately
predict the amount of any ultimate assessment or the final outcome of this
matter.
ACCOUNTING DEVELOPMENTS
The Financial Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," in June 1998 and
SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of the FASB Statement No. 133," in June 1999.
SFAS No. 133 requires that all derivatives be recorded at fair market values on
the balance sheet and establishes new accounting rules for hedging instruments.
SFAS No. 137 defers the effective date of SFAS No. 133 for one year. SFAS No.
133 will now be effective for fiscal years beginning after June 15, 2000; early
adoption is allowed. The Company is conducting an evaluation of hedging policies
and strategies for existing derivatives and any future derivative transactions.
The effect of adoption on the Company's financial statements will ultimately
depend on the policies adopted.
In September 1999, the FASB issued an exposure draft that would amend APB
Opinion No. 16, "Business Combinations," and supersede APB Opinion No. 17,
"Intangible Assets." This exposure draft proposes to modify the method of
accounting for business combinations and addresses the accounting for intan-
gible assets. The Company is currently examining the effects these proposed
changes may have on the operating results and the financial statements of the
Company.
-16-
<PAGE> 19
CAUTIONARY STATEMENTS
Certain expectations and projections regarding future performance of the Company
referenced in this report are forward-looking statements. These expectations and
projections are based on currently available competitive, financial, and
economic data, along with the Company's operating plans and are subject to
future events and uncertainties. Among the events and uncertainties which could
adversely affect future periods are lower than expected volume resulting from
efforts to improve pricing in the future consumption channels of our business,
an inability to meet performance requirements for expected levels of marketing
support payments from The Coca-Cola Company, material changes from expectations
in the cost of raw materials and ingredients, an inability to achieve the
expected timing for returns on cold drink equipment and employee infrastructure
expenditures, uncertainty of expected reimbursements from insurance and/or third
parties relating to the second-quarter 1999 European recall costs, an inability
to meet projections for performance in newly acquired territories, potential
assessment of additional taxes resulting from audits conducted by the Canadian
tax authorities, unexpected costs or effect on European sales associated with
conversion to the common European currency (the euro), and unfavorable interest
rate and currency fluctuations. We caution readers that in addition to the above
cautionary statements, all forward-looking statements contained herein should be
read in conjunction with the detailed cautionary statements found on page 48 of
the Company's Annual Report for the fiscal year ended December 31, 1999.
-17-
<PAGE> 20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1999, the Company acquired all of the stock of CSL of Texas, Inc. ("CSL"),
owner of an 18.4 acre undeveloped tract of land in College Station, Texas that
had become contaminated by prior industrial users. Cleanup is being performed
under the Texas Voluntary Cleanup Program overseen by the Texas Natural
Resources Conservation Commission. The ultimate cost of remediation could be
between $2 million and $4 million. The Company believes it has a claim against
the former owners of CSL for the remediation costs.
In 1998, The Coca-Cola Bottling Company of New York, Inc. ("KONY"), a
subsidiary of the Company, was named as one of the defendants in connection
with the cleanup of contaminated property in Bedford Heights, Ohio owned
in the late-1970's and early-1980's by a subsidiary of KONY that manufactured
china. The current owner of the property is suing KONY and two other defendants
for expenses of cleaning up the property. In January 2000, an environmental
assessment concluded that cleanup could cost approximately $4.7 million. The
plaintiff has asserted KONY's share of the cost should be 7.5%, or approximately
$350,000. The remediation will be conducted under oversight of the Ohio
Environmental Protection Agency.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of shareowners was held on Friday, April 14, 2000 in
Wilmington, Delaware at which the following matters were submitted to a vote of
the shareowners of the Company:
(a) Votes cast for or withheld regarding the election/re-election of Directors
for terms expiring in:
FOR WITHHELD
2003
----
Howard G. Buffett 366,733,416 11,829,403
Johnnetta B. Cole 341,485,859 37,076,960
Jean-Claude Killy 366,717,375 11,845,444
Lowry F. Kline 366,743,873 11,818,946
Additional Directors, whose terms of office as Directors continued after
the meeting, are as follows:
TERM EXPIRING IN 2001 TERM EXPIRING IN 2002
----------------------------------- ------------------------------------
James E. Chestnut John L. Clendenin
J. Trevor Eyton Joseph R. Gladden, Jr.
L. Phillip Humann John E. Jacob
Scott L. Probasco, Jr. Summerfield K. Johnston, Jr.
Robert A. Keller
-18-
<PAGE> 21
(b) Votes cast for or against, and the number of abstentions and broker
non-votes for each other proposal brought before the meeting are as
follows:
BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTES
----------------------- ----------- ----------- ---------- ----------
Approval of the
Long-Term
Incentive Plan 333,308,041 20,440,457 4,742,633 20,071,688
Approval of the
Executive Management
Incentive Plan 331,366,206 22,102,343 5,022,582 20,071,688
Amendment of the
certificate of
incorporation to
eliminate preemptive
rights 339,755,812 6,935,610 11,799,709 20,071,688
Ratification of the
Appointment of
Independent Auditors 370,027,472 5,836,137 2,699,210 --
Shareowner's proposal
to create an
independent nominating
committee 54,445,547 292,564,355 11,481,229 20,071,688
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
EXHIBIT INCORPORATED BY REFERENCE
NUMBER DESCRIPTION OR FILED HEREWITH
---------- ------------------------------------- -------------------------
3.1 Restated Certificate of Incorporation Filed Herewith
of Coca-Cola Enterprises Inc.
(restated as of April 15, 1992) as
amended by Certificate of Amendment
dated as of April 21, 1997 and
Certificate of Amendment dated as of
April 14, 2000.
3.2 Bylaws of Coca-Cola Enterprises Inc. Filed Herewith
as amended through April 14, 2000
12 Statements regarding computations of Filed Herewith
ratios
27 Financial Data Schedule for the Filed Herewith
quarter ended March 31, 2000
(b) Reports on Form 8-K:
During first-quarter 2000, the Company filed the following current reports on
Form 8-K:
DATE OF REPORT DESCRIPTION
- ----------------- ------------------------------------------------------------
January 25, 2000 Consolidated Statements of Income and Condensed Consolidated
Balance Sheet (unaudited) of the Company, reporting results
of operations and financial position for fourth-quarter and
full-year 1999. Report filed on February 3, 2000.
February 22, 2000 Press release announcing changes to the Company's Board of
Directors. Report filed on February 22, 2000.
-19-
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
Date: May 12, 2000 /s/ Patrick J. Mannelly
-------------------------------------------------
Patrick J. Mannelly
Senior Vice President and Chief Financial Officer
Date: May 12, 2000 /s/ Michael P. Coghlan
-------------------------------------------------
Michael P. Coghlan
Vice President, Controller and Principal
Accounting Officer
-20-
<PAGE> 1
EXHIBIT 3.1
------------------------------
| STATE OF DELAWARE |
| SECRETARY OF STATE |
| DIVISION OF CORPORATIONS |
| FILED 10:00 AM 04/15/1992 |
| 72106041 - 388509 |
-----------------------------
RESTATED CERTIFICATE OF INCORPORATION
OF
COCA-COLA ENTERPRISES INC.
(RESTATED AS OF APRIL 15, 1992)
(Originally incorporated on January 25, 1944
under the name of The Hickory Publishing Company)
~~~~~~~~~~~~~
(Pursuant to Section 245 of the General Corporation Law
of the State of Delaware)
~~~~~~~~~~~~~
FIRST: The name of the corporation is Coca-Cola Enterprises Inc.
(hereinafter referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, Wilmington, County of New Castle,
Delaware 19801. The name of the registered agent of the Corporation at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: A. The total number of shares of all classes of stock
that the Corporation shall have authority to issue is Six Hundred Million
(600,000,000) shares, consisting of Five Hundred Million (500,000,000) shares of
common stock, par value $1 per share (hereinafter referred to as "Common Stock")
and One Hundred Million (100,000,000) shares of preferred stock, par value $1
per share (hereinafter referred to as "Preferred Stock").
B. The board of directors of the Corporation is
authorized, subject to any limitations prescribed by law, to provide for the
issuance of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware
(hereinafter referred to as a "Preferred Stock Designation") to establish from
time to time the number of shares to be included in each such series, and to
fix the designation, powers, preferences, and rights of the shares of each such
series and any qualifications, limitations or restrictions thereof. The number
of authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the shares of Common Stock, without a vote of the
holders of the shares of Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the Preferred Stock
Designation or Preferred Stock Designations establishing the series of
Preferred Stock.
<PAGE> 2
C. Each holder of shares of Common Stock shall be
entitled to one vote for each share of Common Stock held of record on all
matters on which the holders of shares of Common Stock are entitled to vote.
FIFTH: A. The business and affairs of the Corporation shall be
managed by the board of directors, and the directors need not be elected by
ballot unless required by the bylaws of the Corporation.
B. The number of directors shall be fixed by, or in the
manner provided in, the bylaws. Commencing with the election of directors at the
annual meeting of stockholders held in 1986, the directors shall be divided,
with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as reasonably possible, with the term of
office of the first class to expire at the next annual meeting of stockholders
thereafter, the term of the office of the second class to expire at the second
annual meeting of stockholders thereafter, and the term of office of the third
class to expire at the third annual meeting of stockholders thereafter, with
each director to hold office until his or her successor shall have been duly
elected and qualified. At each annual meeting of stockholders commencing with
the first annual meeting after the division of directors into classes, directors
elected to succeed those directors whose terms then expire shall be elected for
a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified. All vacancies on
the board of directors and newly created directorships resulting from any
increase in the authorized number of directors shall be filled exclusively by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
C. The board of directors is expressly authorized to
adopt, amend or repeal the bylaws of the Corporation.
SIXTH: A. A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is amended
after this Restated Certificate of Incorporation becomes effective to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
<PAGE> 3
B. Any repeal or modification of the foregoing
Section A by the stockholders of the Corporation shall not adversely affect any
right or protection of a director or the Corporation existing at the time of
such repeal or modification.
SEVENTH: A. In anticipation that the Corporation will cease to be
a wholly owned subsidiary of The Coca-Cola Company, but that The Coca-Cola
Company will remain a substantial stockholder of the Corporation, and in
anticipation that the Corporation and The Coca-Cola Company may engage in the
same or similar activities or lines of business and have an interest in the same
areas of corporate opportunities, and in recognition of the benefits to be
derived by the Corporation through its continued contractual, corporate and
business relations with The Coca-Cola Company (including service of officers and
directors of The Coca-Cola Company as officers and directors of the
Corporation), the provisions of this Article SEVENTH are set forth to regulate
and define the conduct of certain affairs of the Corporation as they may involve
The Coca-Cola Company and its officers and directors, and the powers, rights,
duties and liabilities of the Corporation and its officers, directors and
stockholders in connection therewith.
B. The Coca-Cola Company shall have no duty to refrain
from engaging in the same or similar activities or lines of business as the
Corporation, and neither The Coca-Cola Company nor any officer or director
thereof (except as provided in paragraph C below) shall be liable to the
Corporation or its stockholders for breach of any fiduciary duty by reason of
any such activities of The Coca-Cola Company or of such person's participation
therein. In the event that The Coca-Cola Company acquires knowledge of a
potential transaction or matter which may be a corporate opportunity for both
The Coca-Cola Company and the Corporation, The Coca-Cola Company shall have no
duty to communicate or offer such corporate opportunity to the Corporation and
shall not be liable to the Corporation or its stockholders for breach of any
fiduciary duty as a stockholder of the Corporation by reason of the fact that
The Coca-Cola Company pursues or acquires such corporate opportunity for itself,
directs such corporate opportunity to another person, or does not communicate
information regarding such corporate opportunity to the Corporation.
C. In the event that a director or officer of the
Corporation who is also a director or officer of The Coca-Cola Company acquires
knowledge of a potential transaction or matter which may be a corporate
opportunity for both the Corporation and The Coca-Cola Company, such director or
officer of the Corporation shall have fully satisfied and fulfilled the
fiduciary duty of such director or officer to the Corporation and its
stockholders with respect to such corporate opportunity and shall not be liable
to the Corporation or its stockholders for breach of any fiduciary duty by
reason of the fact that The Coca-Cola Company pursues or acquires such corporate
opportunity for itself or directs such corporate opportunity to another person
or does not communicate information regarding such corporate opportunity to the
Corporation, if such director or officer acts in a manner consistent with the
following policy:
(i) A corporate opportunity offered to any person who is
an officer of the Corporation, and who is also a director but not an
officer of The Coca-Cola Company, shall belong to the Corporation;
<PAGE> 4
(ii) a corporate opportunity offered to any person who is a director
but not an officer of the Corporation, and who is also a director or
officer of The Coca-Cola Company shall belong to the Corporation if
such opportunity is expressly offered to such person in writing solely
in his or her capacity as a director of the Corporation, and otherwise
shall belong to The Coca Cola Company; and (iii) a corporate
opportunity offered to any person who is an officer of both the
Corporation and The Coca-Cola Company shall belong to the Corporation.
D. Any person purchasing or otherwise acquiring any
interest in shares of the capital stock of the Corporation shall be deemed to
have consented to the provisions of this Article SEVENTH.
E. For purposes of this Article SEVENTH:
(1) A director of the Corporation who is Chairman of the
board of directors of the Corporation or of a committee thereof shall
not be deemed to be an officer of the Corporation by reason of holding
such position (without regard to whether such position is deemed an
office of the Corporation under the bylaws of the Corporation), unless
such person is a full-time employee of the Corporation; and
(2) The Coca-Cola Company shall include all subsidiary
corporations and other entities in which The Coca-Cola Company owns
(directly or indirectly) more than 50% of the outstanding voting
capital stock or voting power.
EIGHTH: Any action required or permitted to be taken by the
stockholders of the Corporation shall be effected at an annual or special
meeting of stockholders of the Corporation and may not be effected by any
consent in writing of such stockholders.
NINTH: In addition to any affirmative vote required by law, by this
Certificate of Incorporation or by any Preferred Stock Designation:
(a) any amendment or alteration of this Certificate of
Incorporation by the stockholders;
(b) any amendment or alteration of the bylaws of the Corporation
by the stockholders;
(c) any merger or consolidation of the Corporation with or into
any other corporation other than a merger or consolidation that does not require
the vote of the stockholders of the Corporation;
(d) any sale, lease, or exchange (in one transaction or a series
of transactions) of all or substantially all of the property and assets of the
Corporation; or
(e) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation shall require the affirmative vote of the holders
of at least 66-2/3% of the voting power of all of the outstanding shares of the
Common Stock and any series of Preferred Stock entitled to vote generally in the
election of directors, voting together as a single class. Such affirmative vote
shall be required notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law or of any agreement with any national
securities exchange or otherwise which might otherwise permit a lesser vote or
no vote.
<PAGE> 5
TENTH: The board of directors of the Corporation, when evaluating any
offer of a person, other than the Corporation itself, to (a) make a tender or
exchange offer for any equity security of the Corporation, (b) merge or
consolidate the Corporation with another person, or (c) purchase or otherwise
acquire all or substantially all of the properties and assets of the Corporation
shall, in connection with the exercise of its business judgment in determining
what are the best interests of the Corporation and its stockholders, give due
consideration to all relevant factors, including without limitation (i) the
consideration being offered in relation to the current market price, but also in
relation to the current value of the Corporation in a freely negotiated
transaction and in relation to the board of directors' current estimate of the
future value of the Corporation as an independent entity, (ii) the social and
economic effects on the employees, customers, suppliers and other constituents
of the Corporation and its subsidiaries and on the communities in which the
Corporation and its subsidiaries operate or are located, and (iii) the
desirability of maintaining independence from any other entity.
ELEVENTH: A. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or (if
serving for another corporation at the request of the Corporation) agent or in
any other capacity while serving as a director, officer, employee or (if serving
for another corporation at the request of the Corporation) agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA, excise taxes or penalties and amounts to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or (if serving for another corporation at
the request of the Corporation) agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that except as
provided in Section B hereof with respect to proceedings seeking to enforce
<PAGE> 6
rights to indemnification, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article ELEVENTH or
otherwise.
B. If a claim under Section A of this Article ELEVENTH
is not paid in full by the Corporation within ninety days after a written claim
has been received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or stockholders)
to have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including its
board of directors, independent legal counsel, or stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
C. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Article ELEVENTH shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
D. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
<PAGE> 7
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
TWELFTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
This Restated Certificate of Incorporation was duly adopted by the
board of directors pursuant to Section 245 of the General Corporation Law of the
State of Delaware. This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the Certificate of
Incorporation as amended or supplemented through April 15, 1992, and there is no
discrepancy between such provisions and the provisions of this Restated
Certificate of Incorporation.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed on this 15th day of April, 1992.
COCA-COLA ENTERPRISES INC.
/S/ SUMMERFIELD K. JOHNSTON, JR.
By:------------------------------------
Summerfield K. Johnston, Jr.
Vice Chairman and Chief
Executive Officer
ATTEST:
/S/ J. GUY BEATTY,JR.
- -----------------------------
J. Guy Beatty, Jr., Secretary
<PAGE> 8
- -------------------------------------------------------------------------------
----------------------------
| STATE OF DELAWARE |
| SECRETARY OF STATE |
| DIVISION OF CORPORATIONS |
| FILED 11:10 AM 04/21/1997 |
| 971127667 - 0388509 |
----------------------------
Certificate of Amendment of the
-------------------------------
Certificate of Incorporation
---------------------------
--
Coca-Cola Enterprises Inc.
---------------------------
Under Section 242 of the General Corporation Law
of the State of Delaware
COCA-COLA ENTERPRISES INC., a corporation duly organized and existing
under the laws of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That on February 18, 1997, the Board of Directors duly adopted
the following resolution amending the Certificate of
Incorporation of the Corporation, and declared its
advisability and directed that the amendment be considered at
the next annual meeting of the stockholders of the
Corporation:
RESOLVED, that the Certificate of Incorporation of the Corporation be,
and the same hereby is, amended by deleting the current Article FOURTH
thereof, and substituting the following:
A. The total number of shares of all classes of stock that the
Corporation shall have authority to issue is One Billion One Hundred
Million (1,100,000,000) shares, consisting of One Billion
(1,000,000,000) shares of common stock, par value $1 per share
(hereinafter referred to as "Common Stock") and One Hundred Million
(100,000,000) shares of preferred stock, par value $1 per share
(hereinafter referred to as "Preferred Stock")
B. The board of directors of the Corporation is authorized,
subject to any limitations prescribed by law, to provide for the
issuance of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware
(hereinafter referred to as a "Preferred Stock Designation") to
establish from time to time the number of shares to be included in each
such series, and to fix the designation, powers, preferences, and
rights of the shares of each such series and any qualifications,
limitations or restrictions thereof. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the number
of shares thereof then outstanding) by the affirmative vote of the
holders of a
<PAGE> 9
majority of the shares of Common Stock, without a vote of the holders
of the shares of Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the Preferred Stock
Designation or Preferred Stock Designations establishing the series of
Preferred Stock.
C. Each holder of shares of Common Stock shall be entitled to one
vote for each share of Common Stock held of record on all matters on
which the holders of shares of Common Stock are entitled to vote.
D. Each share of Common Stock of the Corporation issued and
outstanding or held in the treasury of the Corporation immediately
prior to the close of business on May 1, 1997, that being the time when
the amendment of this Article FOURTH of the Certificate of
Incorporation shall have become effective, is changed into and
reclassified as three fully paid and nonassessable shares of Common
Stock, par value $1 per share, and at the close of business on such
date, each holder of record of Common Stock shall, without further
action, be and become the holder of two additional shares of Common
Stock for each share of Common Stock held of record immediately prior
thereto. Effective at the close of business on such date, each
certificate representing shares of Common Stock outstanding or held in
treasury immediately prior to such time shall continue to represent the
same number of shares of Common Stock and as promptly as practicable
thereafter, the Corporation shall issue and cause to be delivered to
each holder of record of shares of Common Stock at the close of
business on such date an additional certificate or certificates
representing two additional shares of Common Stock for each of Common
Stock held of record immediately prior thereto.
SECOND: That on April 21, 1997, at the Corporation's annual meeting
called and held in accordance with the provisions of the General Corporation Law
of the State of Delaware, the amendment was duly approved and adopted by a
majority of the outstanding stock of the Corporation entitled to vote upon the
amendment.
THIRD: That the effective date of this amendment shall be at the
close of business on May 1, 1997.
<PAGE> 10
IN WITNESS WHEREOF, this Certificate of Amendment has been signed on
behalf of the Corporation by its Senior Vice President and attested by its
Assistant Secretary as of the 21st day of April, 1997.
COCA-COLA ENTERPRISES INC.
/S/ LOWRY F. KLINE
------------------------------
Lowry F. Kline
Senior Vice President
Attest:
/S/ E. LISTON BISHOP III
- -----------------------------
E. Liston Bishop III
Assistant Secretary
[Seal]
- -------------------------------------------------------------------------------
<PAGE> 11
Certificate of Amendment of the Restated Certificate of Incorporation
of
Coca-Cola Enterprises Inc.
UNDER SECTION 242 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
COCA-COLA ENTERPRISES INC., a corporation duly organized and
existing under the laws of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That on February 22, 2000, the Board of Directors
duly adopted the following resolution amending the Restated Certificate of
Incorporation of the Corporation, and declared its advisability and directed
that the amendment be considered at the next annual meeting of the stockholders
of the Corporation:
RESOLVED, that Article FOURTH of the Company's Restated Certificate of
Incorporation shall be amended by adding a new paragraph "E" as
follows:
"E. No stockholder of the Corporation shall have any
preemptive right to subscribe to any issue of stock of the
Corporation or to any issue of any securities of the
Corporation convertible into or exchangeable or exercisable
for stock of the Corporation."
SECOND: That on April 14, 2000, at the Corporation's annual
meeting called and held in accordance with the provisions of the General
Corporation Law of the State of Delaware, the amendment was duly approved and
adopted by more than two-thirds of the outstanding stock of the Corporation
entitled to vote upon the amendment.
THIRD: That the foregoing amendment was duly adopted in
accordance with Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, this Certificate of Amendment has been
signed on behalf of the Corporation by its Senior Vice President and attested by
its Assistant Secretary as of the 14th day of April, 2000.
COCA-COLA ENTERPRISES INC.
ATTEST: /S/ JOHN R. PARKER, JR.
---------------------------
John R. Parker, Jr.
Senior Vice President
/S/ E. LISTON BISHOP III
- -------------------------
E. Liston Bishop III
Assistant Secretary
[Seal]
----------------------------
| STATE OF DELAWARE |
| SECRETARY OF STATE |
| DIVISION OF CORPORATIONS |
| FILED 11:00 AM 04/26/2000 |
| 001211503 - 0388509 |
---------------------------
<PAGE> 1
Exhibit 3.2
BY-LAWS
OF
COCA-COLA ENTERPRISES INC.
ARTICLE I
SHAREHOLDERS
Section 1. Place, Date and Time of Holding Annual Meetings. Annual
meetings of shareholders shall be held at such place, date and time as shall be
designated from time to time by the Board of Directors. In the absence of a
resolution adopted by the Board of Directors establishing such place, date and
time, the annual meeting shall be held at 1209 Orange Street, Wilmington,
Delaware, on the second Wednesday in April of each year at 9:00 A.M. (local
time).
Section 2. Voting. Each outstanding share of common stock of the
Company is entitled to one vote on each matter submitted to a vote. The vote for
the election of directors shall be by written ballot. Directors shall be elected
by a plurality of votes cast in the election for such directors. All other
action shall be authorized by a majority of the votes cast unless a greater vote
is required by the Certificate of Incorporation or the laws of Delaware. A
shareholder may vote in person or by proxy.
Section 3. Quorum. The holders of a majority of the issued and
outstanding shares of the common stock of the Company, present in person or
represented by proxy, shall constitute a quorum at all meetings of shareholders.
Section 4. Adjournment of Meetings. In the absence of a quorum or for
any other reason, the chairman of the meeting may adjourn the meeting from time
to time. If the adjournment is not for more than thirty days, the adjourned
meeting may be held without notice other than an announcement at the meeting. If
the adjournment is for more than thirty days, or if a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each shareholder of record entitled to vote at such meeting. At any such
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting originally called.
Section 5. Special Meetings. Special meetings of the shareholders for
any purpose or purposes may be called by the Board of Directors, the Chairman of
the Board of Directors or the President. Special meetings shall be held at the
place, date and time fixed by the Secretary.
Section 6. Notice of Shareholders Meeting. Written notice, stating the
place, date, hour and purpose of the annual or special meeting shall be given by
the Secretary not less than ten nor more than sixty days before the date of the
meeting to each shareholder entitled to vote at such meeting.
Section 7. Organization. The Chairman of the Board of Directors shall
preside at all meetings of shareholders. In the absence of, or in case of a
vacancy in the office of, the Chairman of the Board of Directors, the President,
or in his absence any Vice President in order of seniority in time in office,
shall preside. The Secretary of the Company shall act as secretary at all
meetings of the shareholders and in the Secretary's absence, the presiding
officer may appoint a secretary.
<PAGE> 2
Section 8. Inspectors of Election. All votes by ballot at any meeting
of shareholders shall be conducted by such number of inspectors of election as
are appointed for that purpose by either the Board of Directors or by the
chairman of the meeting. The inspectors of election shall decide upon the
qualifications of voters, count the votes and declare the results.
Section 9. Record Date. The Board of Directors, in order to determine
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise any rights
in respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, shall fix in advance a record date which shall not be
more than sixty nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action and in such case only such
shareholders as shall be shareholders of record on the date so fixed, shall be
entitled to such notice of or to vote at such meeting or any adjournment
thereof, or be entitled to receive payment of any such dividend or other
distribution or allotment of any rights or be entitled to exercise any such
rights in respect of stock or to take any such other lawful action, as the case
may be, notwithstanding any transfer of any stock on the books of the Company
after any such record date fixed as aforesaid.
Section 10. Notice of Shareholder Proposals. (a) At any annual meeting
of the shareholders, only such business shall be conducted as shall have been
brought before the meeting (i) by or at the direction of the Board of Directors
or (ii) by any shareholder of the Company who complies with the notice
procedures set forth in this Section 10(a) provided, in each case, that such
business proposed to be conducted is, under the law, an appropriate subject for
shareholder action. For business to be properly brought before an annual meeting
by a shareholder, the shareholder must have given timely notice thereof in
writing to the Secretary of the Company. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 30 days nor more than 60 days prior to the meeting;
provided, however, that in the event that less than 40 days' prior public
disclosure of the date of the meeting is given or made by the Company, notice by
the shareholder to be timely must be received not later than the close of
business on the 10th day following the day on which such public disclosure was
made. A shareholder's notice to the Secretary shall set forth as to each matter
such shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Company's books, of the shareholder proposing
such business, (iii) the class and number of shares of the Company which are
beneficially owned by such shareholder and (iv) any material interest of such
shareholder in such business. The Chairman of an annual meeting may, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this Section 10(a) and, if he should so determine, he shall so declare to the
meeting and any such business so determined to be not properly brought before
the meeting shall not be transacted.
(b) Only persons who are nominated in accordance with the procedures
set forth in the By-Laws shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors of the Company may
be made at a meeting of shareholders (i) by or at the direction of the Board of
Directors or (ii) by any shareholder of the Company entitled to vote for the
election of directors at the meeting who complies with the notice procedures set
forth in this Section 10(b). Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the Company. To be timely, a shareholder's notice
2
<PAGE> 3
shall be delivered to or mailed and received at the principal executive offices
of the Company not less than 30 days nor more than 60 days prior to the meeting;
provided, however, that in the event that less than 40 days' prior disclosure of
the date of the meeting is given or made by the Company, notice by the
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such public disclosure was
made. Such shareholder's notice shall set forth (i) as to each person whom such
shareholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (ii) as to
the shareholder giving the notice (x) the name and address, as they appear on
the Company's books, of such shareholder and (y) the class and number of shares
of the Company which are beneficially owned by such shareholder. At the request
of the Board of Directors any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the Company that
information required to be set forth in the shareholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
director of the Company unless nominated in accordance with the procedures set
forth in the By-Laws. The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the By-Laws and, if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
ARTICLE II
DIRECTORS
Section 1. Number of Directors. The whole Board of Directors shall
consist of not less than three (3) nor more than twenty (20) members, the exact
number to be set from time to time by the Board of Directors. No decrease in the
number of directors shall shorten the term of any incumbent director. In absence
of the Board of Directors setting the number of directors, the number shall be
12.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as the Board of Directors may determine from time to
time.
Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors, the President, the
Secretary or by a majority of the directors by written request to the Secretary.
Section 4. Notice of Meetings. The Chairman, a Vice Chairman or the
Secretary shall give notice of all meetings of the Board of Directors by mailing
the notice at least three days before each meeting or by telegraphing or
telephoning the directors not later than one day before the meeting. The notice
shall state the time, date and place of the meeting, which shall be determined
by the Chairman of the Board of Directors, or, in absence of the Chairman, by
the Secretary of the Company, unless otherwise determined by the Board of
Directors.
Section 5. Quorum and Voting. A majority of the directors holding
office shall constitute a quorum for the transaction of business. Except as
3
<PAGE> 4
otherwise specifically required by Delaware law or by the Certificate of
Incorporation of the Company or by these By-Laws, any action required to be
taken shall be authorized by a majority of the directors present at any meeting
at which a quorum is present.
Section 6. General Powers of Directors. The business and affairs of the
Company shall be managed under the direction of the Board of Directors.
Section 7. Chairman. The Board of Directors may elect a Chairman of the
Board of Directors, who shall preside as chairman of all meetings of the
directors and all meetings of the shareholders of the Company, and who shall
perform such other duties as may be assigned from time to time by the Board of
Directors. The Board of Directors may also elect one or more Vice Chairmen, who
shall perform such duties as may be assigned from time to time by the Board of
Directors. In the absence of, or in the case of a vacancy in the office of, the
Chairman of the Board of Directors, the Vice Chairman shall preside. If there is
more than one Vice Chairman, the Vice Chairman who is also an officer, or, if
each is an officer, the Vice Chairman who is the senior officer, shall preside.
In the absence of, or, in the case of vacancies in the offices of, Chairman and
Vice Chairman of the Board of Directors, a chairman selected by the Chairman of
the Board of Directors, or if he fails to do so, by the directors, shall
preside.
Section 8. Compensation of Directors. Directors and members of any
committee of the Board of Directors shall be entitled to such reasonable
compensation and fees for their services as shall be fixed from time to time by
resolution of the Board of Directors and shall also be entitled to reimbursement
for any reasonable expenses incurred in attending meetings of the Board of
Directors and any committee thereof, except that a Director who is an officer or
employee of the Company shall receive no compensation or fees for serving as a
Director or a committee member.
Section 9. Qualification of Directors. Each person who shall attain the
age of 70 shall not thereafter be eligible for nomination or renomination as a
member of the Board of Directors.
Section 10. Resignation of Directors Who Cease to be Officers of the
Company. Any director who was an officer of the Company at the time of his or
her election or most recent reelection shall resign as a member of the Board of
Directors simultaneously when he or she ceases to be an officer of the Company.
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS
Section 1. Committees of the Board of Directors. The Board of Directors
shall designate an Executive Committee, an Audit Committee, a Compensation
Committee, a Committee on Directors, a Public Issues Review Committee, a
Retirement Plan Review Committee, an Affiliated Transaction Committee, and a
Committee on Corporate Governance, each of which shall have and may exercise the
powers and authority of the Board of Directors to the extent hereinafter
provided. The Board of Directors may designate one or more additional committees
of the Board of Directors with such powers as shall be specified in the
resolution of the Board of Directors. Each committee shall consist of such
number of directors as shall be determined from time to time by resolution of
the Board of Directors. In the absence or disqualification of a member of a
4
<PAGE> 5
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously elect another member of the Board of Directors to act at the meeting
in the place of any such absent or disqualified member.
All actions of the Board of Directors designating committees, or
electing or removing members of such committees, shall be taken by a resolution
passed by a majority of the whole Board.
Each committee shall keep regular minutes of its meetings. All action
taken by a committee shall be reported to the Board of Directors at its meeting
next succeeding such action and shall be subject to approval and revision by the
Board, provided that no legal rights of third parties shall be affected by such
revisions.
Section 2. Election of Committee Members. The members of each committee
shall be elected by the Board of Directors and shall serve until the first
meeting of the Board of Directors after the annual meeting of shareholders and
until their successors are elected and qualified or until the members' earlier
resignation or removal. The Board of Directors may designate the Chairman of
each committee. Vacancies may be filled by the Board of Directors at any
meeting.
Section 3. Procedure/Quorum/Notice. The Chairman, Vice Chairman or a
majority of any committee may call a meeting of that committee. A quorum of any
committee shall consist of a majority of its members unless otherwise provided
by resolution of the Board of Directors. The majority vote of a quorum shall be
required for the transaction of business. The secretary of the committee or the
chairman of the committee shall give notice of all meetings of the committee by
mailing the notice to the members of the committee at least three days before
each meeting or by telegraphing or telephoning the members not later than one
day before the meeting. The notice shall state the time, date and place of the
meeting. Each committee shall fix its other rules of procedure.
Section 4. Executive Committee. During the interval between meetings of
the Board of Directors, the Executive Committee shall have and may exercise all
the powers and authority of the Board of Directors, to act upon any matters
which, in the opinion of the Chairman of the Board, should not be postponed
until the next previously scheduled meeting of the Board of Directors; but, to
the extent prohibited by law, shall not have the power or authority of the Board
of Directors in reference to amending the Certificate of Incorporation of the
Company (except that the Committee may, to the extent authorized in the
resolutions providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the Company or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Company or fix the number of shares of
any series of stock or authorize the increase or decrease of the shares of any
series), adopting an agreement of merger or consolidation for the Company,
recommending to the shareholders of the Company the sale, lease or exchange of
all or substantially all of the Company's property and assets, recommending to
the shareholders a dissolution of the Company or a revocation of a dissolution,
or amending the By-Laws of the Company. The Executive Committee shall have the
power and authority to authorize the issuance or sale of the capital stock of
the Company.
Section 5. Audit Committee. The Audit Committee shall have the power to
recommend to the Board of Directors the selection and engagement of independent
5
<PAGE> 6
accountants to audit the books and accounts of the Company and the discharge of
the independent accountants. The Audit Committee shall review the scope of the
audits as recommended by the independent accountants, the scope of the internal
auditing procedures of the Company and the system of internal accounting
controls and shall review the reports to the Audit Committee of the independent
accountants and the internal auditors.
Section 6. Compensation Committee. The Compensation Committee shall
have the powers and authorities vested in it by the incentive, stock option and
similar plans of the Company. The Compensation Committee shall have the power to
approve, disapprove, modify or amend all plans designed and intended to provide
compensation primarily for officers of the Company. The Compensation Committee
shall review, fix and determine from time to time the salaries and other
remunerations of all officers of the Company.
Section 7. Committee on Directors. The Committee on Directors shall
have the power to recommend candidates for election to the Board of Directors
and shall consider nominees for directorships submitted by shareholders. The
Committee on Directors shall consider issues involving potential conflicts of
interest of directors and committee members and recommend and review all matters
relating to fees and retainers paid to directors, committee members and
committee chairmen.
Section 8. Public Issues Review Committee. The Public Issues Review
Committee shall have the power to review Company policy and practice relating to
significant public issues of concern to the shareholders, the Company, the
business community and the general public. The Committee may also review
management's position on shareholder proposals involving issues of public
interest to be presented at annual or special meetings of shareholders.
Section 9. Retirement Plan Review Committee. The Retirement Plan Review
Committee shall have the power to review the administration of all employee
retirement plans for the Company and the financial condition of all trusts and
other funds established pursuant to such plans. The Retirement Plan Review
Committee shall also have the power to recommend to the Board of Directors the
adoption or amendment of any employee retirement plan of the Company.
Section 10. Affiliated Transaction Committee.
(a) The Affiliated Transaction Committee shall review,
consider and pass upon any Affiliated Transaction, and no such transaction shall
be effected without the concurrence of the Affiliated Transaction Committee. The
Affiliated Transaction Committee shall have the powers to (i) negotiate with the
representatives of any party to an Affiliated Transaction; (ii) require approval
of an Affiliated Transaction by a vote of the share owners of Coca-Cola
Enterprises Inc. which may be greater than or in addition to any vote required
by law; and (iii) engage Independent Advisers at the reasonable expense of the
Company, and without prior approval of the Company, to assist in its review and
decision regarding any Affiliated Transaction.
(b) The Affiliated Transaction Committee shall consist of at
least three Independent Directors, with each other Independent Director being an
alternate member if any committee member is unable or unwilling to serve.
(c) The Affiliated Transaction Committee shall cease to exist
on the later of (i) February 10, 2001 or (ii) the date on which any Affiliated
6
<PAGE> 7
Transaction being reviewed, considered and passed upon by the Affiliated
Transaction Committee prior to February 10, 2001 shall have been either
consummated or abandoned.
(d) For the purposes of the foregoing Article III, Section 10,
the following definitions shall apply:
(i) "Company" means Coca-Cola Enterprises Inc. or
any company in which Coca-Cola Enterprises Inc. has more than
50% of the voting power in the election of directors or in
which it has the power to elect a majority of the Board of
Directors.
(ii) "The Coca-Cola Company" means The Coca-Cola
Company or any company in which The Coca-Cola Company has more
than 50% of the voting power in the election of directors or
in which it has the power to elect a majority of the Board of
Directors.
(iii) "Affiliate" means any entity (other than the
Company) in which The Coca-Cola Company has a 20% or greater
equity or other ownership interest, or any entity controlled
directly or indirectly by such Affiliate. Notwithstanding the
above, no entity shall be an Affiliate solely by virtue of the
rights granted to The Coca-Cola Company pursuant to a bottling
contract.
(iv) "Affiliated Transaction" means any proposed
merger or consolidation with, purchase of an equity interest
in, or purchase of assets other than in the ordinary course of
business from an Affiliate. and which transaction has an
aggregate value exceeding $10 million.
(v) "Independent Directors" means any member of the
Company's Board of Directors who (i) is not, and for the past
five years has not been, an officer, director or employee of
The Coca-Cola Company or an Affiliate; (ii) does not own in
excess of 1% of the shares of The Coca-Cola Company; and (iii)
own any equity or other ownership interest in an entity
(except as permitted by the preceding (ii) and other than in
the Company) which is a party to the Affiliated Transaction.
(vi) "Independent Adviser" means any legal or
financial adviser or other expert (i) that has not represented
or provided services to The Coca-Cola Company during the past
calendar year, or (ii) notwithstanding (i) above, that the
Affiliated Transaction Committee (as defined below)
determines, after due inquiry, is able to represent it in an
independent manner not adverse to the interests of the Company
and its stockholders.
Section 11. Committee on Corporate Governance. The Committee on
Corporate Governance shall have the power to review and make recommendations to
the Board regarding corporate governance policies and issues of the Company and
to review periodically the performance of the chief executive officer, chief
operating officer, and where appropriate, other senior officers. In consultation
with the chief executive officer, it shall also evaluate and recommend to the
Board candidates for the positions of chief executive officer and chief
operating officer and, where appropriate, other senior officer positions, as
they may become vacant.
7
<PAGE> 8
ARTICLE IV
NOTICE AND WAIVER OF NOTICE
Section 1. Notice. Any notice required to be given to shareholders or
directors under these By-Laws, the Certificate of Incorporation or by law may be
given by mailing the same, addressed to the person entitled thereto, at such
person's last known post office address and such notice shall be deemed to be
given at the time of such mailing.
Section 2. Waiver of Notice. Whenever any notice is required to be
given under these By-Laws, the Certificate of Incorporation or by law, a waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of any regular or special meeting of the shareholders, directors
or a committee of directors need be specified in any written waiver of notice.
ARTICLE V
OFFICERS
Section 1. Officers of the Company. The officers of the Company shall
be selected and elected by the Board of Directors and shall be a President, one
or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors may
elect a Controller and one or more of the following: Senior Executive Vice
President, Executive Vice President, Senior Vice President, Assistant Vice
President, Assistant Secretary, Associate Treasurer, Assistant Treasurer,
Associate Controller and Assistant Controller. Two or more offices may be held
by the same person.
The Board of Directors may designate the position of Chairman of the
Board of Directors as an officer of the Company, who, subject to the overall
direction and supervision of the Board of Directors and Committees thereof,
shall be the senior executive officer of the Company and shall have such powers
and perform such duties as may be assigned by the Board of Directors.
The Company may have a Chief Executive Officer who shall be elected by
the Board of Directors and who, subject to the overall direction and supervision
of the Board of Directors and Committees thereof, and the Chairman of the Board,
if the Chairman is an officer of the Company, shall be in general charge of the
affairs of the Company and shall consult with and advise the Board of Directors,
the committees thereof, and the Chairman of the Board, if the Chairman is an
officer of the Company, on the business and affairs of the Company.
The Company may have a Chief Operating Officer who shall be elected by
the Board of Directors and who, subject to the overall direction and supervision
of the Chief Executive Officer, shall be in general charge, control and
supervision over the administration and operations of the Company and shall have
such other duties and powers as may be imposed or given by the Board of
Directors.
8
<PAGE> 9
If there is no Chief Operating Officer, the Company may have one or
more Principal Operating Officers who shall be elected by the Board of Directors
and who, subject to the overall direction and supervision of the Chief Executive
Officer, shall be in general charge, control and supervision over such of the
operations of the Company as may be determined by the Chief Executive Officer
and shall have such other duties and powers as may be imposed or given by the
Board of Directors.
The Company may have a Chief Administrative Officer who shall be
elected by the Board of Directors and who, subject to the overall direction and
supervision of the Chief Executive Officer, shall be in general charge, control
and supervision over such of the corporate administration functions of the
Company as may be determined by the Chief Executive Officer and shall have such
other duties and powers as may be imposed or given by the Board of Directors.
The Company may have a Chief Financial Officer who shall be elected by
the Board of Directors and shall have general supervision over the financial
affairs of the Company. The Company may also have a Director of Internal Audit
who shall be elected by the Board of Directors.
The Company may have a General Counsel who shall be elected by the
Board of Directors and shall have general supervision of all matters of a legal
nature concerning the Company, unless the Board of Directors has also elected a
General Tax Counsel, in which event the General Tax Counsel shall have general
supervision of all tax matters of a legal nature concerning the Company.
Section 2. Election of Officers. At the first meeting of the Board of
Directors after each annual meeting of shareholders, the Board of Directors
shall elect the officers. From time to time the Board of Directors may elect
other officers.
Section 3. Tenure of Office; Removal. Each officer shall hold office
until the first meeting of the Board of Directors after the annual meeting of
shareholders following the officer's election and until the officer's successor
is elected and qualified or until the officer's earlier resignation or removal.
Each officer shall be subject to removal at any time, with or without cause, by
the affirmative vote of a majority of the entire Board of Directors.
Section 4. President. The President shall have such powers and perform
such duties as may be assigned by the Board of Directors or by the Chairman of
the Board of Directors. In the absence or disability of the President, his or
her duties shall be performed by such Vice Presidents as the Chairman of the
Board of Directors or the Board of Directors may designate. The President shall
have the power to make and execute contracts on the Company's behalf and to
delegate such power to others.
Section 5. Vice Presidents. Each Vice President shall have such powers
and perform such duties as may be assigned to the Vice President by the Board of
Directors or the President. Each Vice President shall have the power to make and
execute contracts on the Company's behalf.
Section 6. Assistant Vice Presidents. An Assistant Vice President shall
perform such duties as may be assigned to him by the Board of Directors, the
President or any Vice President.
Section 7. Secretary. The Secretary shall keep minutes of all meetings
of the shareholders and of the Board of Directors, and shall keep, or cause to
be kept, minutes of all meetings of Committees of the Board of Directors, except
where such responsibility is otherwise fixed by the Board of Directors.
9
<PAGE> 10
The Secretary shall issue all notices for meetings of the shareholders and Board
of Directors and shall have charge of and keep the seal of the Company and shall
affix the seal attested by the Secretary's signature to such instruments or
other documents as may properly require same. The Secretary shall cause to be
kept such books and records as the Board of Directors, the Chairman of the Board
of Directors or the President may require; and shall cause to be prepared,
recorded, transferred, issued, sealed and cancelled certificates of stock as
required by the transactions of the Company and its shareholders. The Secretary
shall attend to such correspondence and such other duties as may be incident to
the office of the Secretary or assigned to him by the Board of Directors or the
President.
In the absence of the Secretary, an Assistant Secretary is authorized
to assume the duties herein imposed upon the Secretary and any Assistant
Secretary or other duly authorized officer may affix the seal of the Company to
such instruments or other documents as may require the same.
Section 8. Treasurer. The Treasurer shall perform all duties and acts
incident to the position of Treasurer, shall have custody of the Company funds
and securities, and shall deposit all money and other valuable effects in the
name and to the credit of the Company in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the Company
as may be authorized, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, whenever required, an account of all the
transactions of the Treasurer and of the financial condition of the Company. The
Treasurer shall vote all of the stock owned by the Company in any corporation
and may delegate that power to others. The Treasurer shall perform such other
duties as may be assigned to the Treasurer by the Board of Directors, the
President or the Chief Financial Officer and shall report to the Chief Financial
Officer or, in the absence of the Chief Financial Officer, to the President.
In the absence of the Treasurer, an Assistant Treasurer is authorized
to assume the duties herein imposed upon the Treasurer.
Section 9. Controller. The Controller shall keep or cause to be kept in
the books of the Company provided for that purpose a true account of all
transactions and of the assets and liabilities of the Company. The Controller
shall prepare and submit to the Chief Financial Officer or, in the absence of
the Chief Financial Officer, to the President, such financial statements and
schedules as may be required to keep the Chairman of the Board of Directors, the
President and the Chief Financial Officer currently informed of the operations
and financial condition of the Company, and perform such other duties as may be
assigned by the Chief Financial Officer, or the President.
In the absence of the Controller, an Assistant Controller is authorized
to assume the duties herein imposed upon the Controller.
Section 10. Director of Internal Audit. The Director of Internal Audit
shall cause to be performed, and have general supervision over, auditing
activities of the financial transactions of the Company, including the
coordination of such auditing activities with the independent accountants of the
Company and shall perform such other duties as may be assigned to him from time
to time. The Director of Internal Audit shall report to the Chief Executive
Officer or, in the absence of the Chief Executive Officer, to the President.
From time to time at the request of the Audit Committee, the Director of
Internal Audit shall inform that Committee of the auditing activities of the
Company.
10
<PAGE> 11
ARTICLE VI
RESIGNATIONS; FILLING OF VACANCIES
Section 1. Resignations. Any director, member of a committee, or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, and, if no time be specified,
at the time of its receipt by the Chairman of the Board of Directors or the
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
Section 2. Filling of Vacancies. If the office of any director becomes
vacant, the directors then in office, although less than a quorum, or, if the
number of directors is increased, the directors then in office, may elect any
qualified person to fill such vacancy. In the case of a vacancy in the office of
a director caused by an increase in the number of directors, the person so
elected shall hold office until the next annual meeting of shareholders, or
until his successor shall be elected and qualified. In the case of a vacancy in
the office of a director resulting otherwise than from an increase in the number
of directors, the person so elected to fill such vacancy shall hold office for
the unexpired term of the director whose office became vacant. If the office of
any officer becomes vacant, the Chairman of the Board of Directors may elect any
qualified person to fill such vacancy temporarily until the Board of Directors
elects any qualified person for the unexpired portion of the term. Such person
shall hold office for the unexpired term and until the officer's successor shall
be duly elected and qualified or until the officer's earlier resignation or
removal.
ARTICLE VII
CAPITAL STOCK
Section 1. Form and Execution of Certificates. The certificates of
shares of the capital stock of the Company shall be in such form as shall be
approved by the Board of Directors. The certificates shall be signed by the
Chairman or Vice Chairman of the Board of Directors or the President, or a Vice
President, and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer. Each certificate of stock shall certify the number of
shares owned by the shareholder in the Company.
A facsimile of the seal of the Company may be used in connection with
the certificates of stock of the Company, and facsimile signatures of the
officers named in this Section may be used in connection with said certificates.
In the event any officer whose facsimile signature has been placed upon a
certificate shall cease to be such officer before the certificate is issued, the
certificate may be issued with the same effect as if such person were an officer
at the date of issue.
Section 2. Record Ownerships. All certificates shall be numbered
appropriately and the names of the owners, the number of shares and the date of
issue shall be entered in the books of the Company. The Company shall be
entitled to treat the holder of record of any share of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other person, whether
or not it shall have express or other notice thereof, except as required by the
laws of Delaware.
11
<PAGE> 12
Section 3. Transfer of Shares. Upon surrender to the Company or to a
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the Company, if it is satisfied that all
provisions of law regarding transfers of shares have been duly complied with, to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Lost, Stolen or Destroyed Stock Certificates. Any person
claiming a stock certificate in lieu of one lost, stolen or destroyed shall give
the Company an affidavit as to such person's ownership of the certificate and of
the facts which prove that it was lost, stolen or destroyed. The person shall
also, if required by the Treasurer or Secretary of the Company, deliver to the
Company a bond, sufficient to indemnify the Company against any claims that may
be made against it on account of the alleged loss, theft or destruction of any
such certificate or the issuance of such new certificate. Any Vice President or
the Secretary or any Assistant Secretary of the Company is authorized to issue
such duplicate certificates or to authorize any of the transfer agents and
registrars to issue and register such duplicate certificates.
Section 5. Regulations. The Board of Directors from time to time may
make such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of shares.
Section 6. Transfer Agent and Registrar. The Board of Directors may
elect such transfer agents and registrars of transfers as it may deem necessary,
and may require all stock certificates to bear the signature of either or both.
ARTICLE VIII
SEAL
The Board of Directors shall provide a suitable seal containing the
name of the Company, the year "1986", and the words, "CORPORATE SEAL, DELAWARE,"
or other appropriate words. The Secretary shall have custody of the seal.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company for each year shall end on December 31
in each year or shall end on such other date as may be determined by the Audit
Committee from time to time.
12
<PAGE> 13
ARTICLE X
AMENDMENTS
Section 1. Directors may Amend By-Laws. The Board of Directors shall
have the power to make, amend and repeal the By-Laws of the Company at any
regular or special meeting of the Board of Directors.
Section 2. By-Laws Subject to Amendment by Shareholders. All By-Laws
shall be subject to amendment, alteration, or repeal by the shareholders
entitled to vote at any annual meeting or at any special meeting.
ARTICLE XI
EMERGENCY BY-LAWS
Section 1. Emergency By-Laws. This Article XI shall be operative during
any emergency resulting from an attack on the United States or on a locality in
which the Company conducts its business or customarily holds meetings of its
Board of Directors or its shareholders, or during any nuclear or atomic disaster
or during the existence of any catastrophe or other similar emergency condition,
as a result of which a quorum of the Board of Directors or the Executive
Committee thereof cannot be readily convened (an "emergency"), notwithstanding
any different or conflicting provision in the preceding Articles of these
By-Laws or in the Certificate of Incorporation of the Company. To the extent not
inconsistent with the provisions of this Article, the By-Laws provided in the
preceding Articles and the provisions of the Certificate of Incorporation of the
Company shall remain in effect during such emergency, and upon termination of
such emergency, the provisions of this Article XI shall cease to be operative.
Section 2. Meetings. During any emergency, a meeting of the Board of
Directors, or any committee thereof, may be called by any officer or director of
the Company. Notice of the time and place of the meeting shall be given by any
available means of communication by the person calling the meeting to such of
the directors and/or Designated Officers, as defined in Section 3 hereof, as it
may be feasible to reach. Such notice shall be given at such time in advance of
the meeting as, in the judgment of the person calling the meeting, circumstances
permit.
Section 3. Quorum. At any meeting of the Board of Directors, or any
committee thereof, called in accordance with Section 2 of this Article XI, the
presence or participation of two directors, one director and a Designated
Officer or two Designated Officers shall constitute a quorum for the transaction
of business.
The Board of Directors or the committees thereof, as the case may be,
shall, from time to time but in any event prior to such time or times as an
emergency may have occurred, designate the officers of the Company in a numbered
list (the "Designated Officers") who shall be deemed, in the order in which they
appear on such list, directors of the Company for purposes of obtaining a quorum
during an emergency, if a quorum of directors cannot otherwise be obtained.
13
<PAGE> 14
Section 4. By-Laws. At any meeting called in accordance with Section 2
of this Article XI, the Board of Directors or the committees thereof, as the
case may be, may modify, amend or add to the provisions of this Article XI so as
to make any provision that may be practical or necessary for the circumstances
of the emergency.
Section 5. Liability. No officer, director or employee of the Company
acting in accordance with the provisions of this Article XI shall be liable
except for willful misconduct.
Section 6. Repeal or Change. The provisions of this Article XI shall be
subject to repeal or change by further action of the Board of Directors or by
action of the shareholders, but no such repeal or change shall modify the
provisions of Section 5 of this Article XI with regard to action taken prior to
the time of such repeal or change.
14
<PAGE> 1
EXHIBIT 12
COCA-COLA ENTERPRISES INC.
EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(In millions except ratios)
QUARTER ENDED
--------------------
MARCH 31, APRIL 2,
2000 1999
--------- --------
Computation of Earnings:
Loss from continuing operations before
income taxes........................................ $ (51) $ (91)
Add:
Interest expense.................................... 189 182
Amortization of debt premium/discount and expenses.. 8 7
Interest portion of rent expense.................... 6 7
------- -------
Earnings as Adjusted.................................. $ 152 $ 105
======= =======
Computation of Fixed Charges:
Interest expense..................................... $ 189 $ 182
Capitalized interest................................. -- 1
Amortization of debt premium/discount and expenses... 8 7
Interest portion of rent expense..................... 6 7
------- -------
Fixed Charges......................................... 203 197
Preferred stock dividends (a)......................... 1 1
------- -------
Combined Fixed Charges and Preferred Stock Dividends.. $ 204 $ 198
======= =======
Ratio of Earnings to Fixed Charges (d)................ (b) (c)
======= =======
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends (d)........................ (b) (c)
======= =======
(a) Preferred stock dividends have been increased to an amount representing the
pretax earnings which would be required to cover such dividend requirements.
(b) Earnings for March 31, 2000 were insufficient to cover fixed charges and
combined fixed charges and preferred stock dividends by $51 million and $52
million, respectively.
(c) Earnings for April 2, 1999 were insufficient to cover fixed charges and
combined fixed charges and preferred stock dividends by $92 million and $93
million, respectively.
(d) Ratios were calculated prior to rounding to millions.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE FILER FOR THE PERIOD ENDED MARCH 31, 2000
INCLUDED IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31,
2000 (COMMISSION FILE NO. 001-9300) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000804055
<NAME> COCA-COLA ENTERPRISES
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 81
<SECURITIES> 0
<RECEIVABLES> 1,353
<ALLOWANCES> 63
<INVENTORY> 632
<CURRENT-ASSETS> 2,446
<PP&E> 9,295
<DEPRECIATION> 3,734
<TOTAL-ASSETS> 22,339
<CURRENT-LIABILITIES> 3,400
<BONDS> 10,169
0
44
<COMMON> 449
<OTHER-SE> 2,299
<TOTAL-LIABILITY-AND-EQUITY> 22,339
<SALES> 3,293
<TOTAL-REVENUES> 3,293
<CGS> 2,012
<TOTAL-COSTS> 2,012
<OTHER-EXPENSES> (1)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 196
<INCOME-PRETAX> (51)
<INCOME-TAX> (17)
<INCOME-CONTINUING> (34)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34)
<EPS-BASIC> (0.08)
<EPS-DILUTED> (0.08)
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